Posted tagged ‘Arcade business’

The Herald Tribune has the story on an operator in the area of Bradenton, FL who has made it his objective to expand his business into a family entertainment center which will be called Saturn 5. He has been running other amusement related businesses in the area, one of which is an arcade that he has kept going despite running it at a loss for the past three-and-a-half years, known as Fun-and-Games (sounds like they should have been a part of Stride’s campaign to Save the Arcades). He also owns a distribution company, known as Apollo Amusements. The Saturn 5 facility, which will have 20,000 sq. ft. of space and will feature a space-theme that follows the Apollo missions, will expand beyond video arcades to include activities like miniature golf, pool, video poker, an inflatable obstacle course and party rooms. The facility should be fully operational soon and we wish them the best of luck in making the business a success.

It’s that time where we start to receive news about different public companies and their profit or loss over a certain period of time. These glimpes generally mention the arcade division of said companies in case they have them and that is the case with both Capcom and Namco, who we will discuss here. So how have their arcade divisions fared over the past nine months?

First off Capcom, who posted gains that were partly attributed to tax credits that the company was able to secure. One the arcade side: “Capcom’s arcade operations saw sales fall 11% but operating income was up more than 295% thanks to a “profitability improvement strategy.” This is talking about Capcom owned arcades and not Capcom-made and sold arcade titles. The jump in income happened despite the (paraphrasing slightly here) “Japanese economy not really seeing any recovery during the nine-month period, and consumer spending seemed to be in a slump…” Probably one of the more interesting things I find about Capcom’s report is how terrible their Wii game sales are, which is leading the company to scale back on developments for that system. This isn’t the first third-party developer I have heard of not making what they expected to off of Nintendo’s cash cow.

Next up is Namco, which doesn’t appear to be doing too well over these past nine months. The company saw a 76% drop in operating income during that time, loosing nearly $130million overall and they are expecting a full year loss of nearly $342 million. They have also announced that they will be laying off 630 employees. Whether this will affect their arcade divisions remains to be seen – according to the company, arcade game machines achieved “steady results” for the company along with their character toy sales. On the flipside however, Namco has two divisions dedicated to arcades – one to develop and sale games and another to operate arcade locations. According to the official report, “both the Visual and Music Content business and the Amusement Facility business posted sluggish results; the former owing to the downsizing of the visual package software market and the latter reflecting the significant effects of a slump in personal consumption.” That slump in consumption I believe is by Japanese consumers (as indicated by the first link above which mentions that specifically) but that might also include international market since I don’t know of consumption going up in most places. Either way it appears that Namco’s consumer (i.e. game console) division is where most of the trouble lays right now, with the only game showing strong results is the arcade port of Tekken 6. Interesting how that works in a world where arcades are “dead” ,eh? With that in mind I really hope that they don’t go back to their ways of porting an arcade title over within a few short months of the arcade release however.

While we’re speaking of Namco, I did find that there is a new account on Youtube called NamcoAmerica that currently features a promo video of Tank! Tank! Tank! and Go Go Grand Prix. I can’t seem to access their main site at the moment but it looks like they are jumping on the Youtube bandwagon, which is a good thing. here’s Go Go GrandPrix in case you missed that in our EAG coverage.

It’s one thing when an arcade business has to close it’s doors due to poor business performance but it’s something else when the landlord shuts the business down simply because they want to “go in another direction”(of course what that really means is they probably found another business with more money that can muscle the arcade out). That is the sad case of Fun & Games in Auburn New York. The management at the Fingerlakes Mall decided recently that they want to go in a new direction and part of that meant closing down the arcade there, despite the fact that the business had always been on time with their rent. It sounds as though contractually Fun & Games has no recourse here with the management but on the bright side they are looking into relocating the business but that is always a proposition that is easier said than done.

When these things happen and the arcade owner has little say in what is happening with their own business, perhaps one of the more effective recourses is for the arcade’s customers to make some noise about it it directly to the management. Between hearing from consumers who shop at the mall and the possibility of this becoming something of an embarrassment to the managers, it could result in a reversal of the decision. Of course after this I wouldn’t blame the owner if he didn’t want to stick around the mall anymore but as long as it could buy them some time to find a new spot, then making a ruckus about it would be worth it.

When you run a company, you need a plan if you want to succeed in that business. Some corporations are more open about their plans in public than others and when it comes to the arcade industry, most companies are tight-lipped about what they intend on doing. Every company in the industry should be interested in seeing arcades expand and grow and when it comes to that, Sega has a plan for doing their part to revitalize the business as we read in an article from Siliconera.

Now the article does start out with a slightly false premise by suggesting that “arcade business is down, way down”. I guess it depends on what era you are comparing it too but really, my own arcade business is doing great at the moment and I know of others who also are seeing good business this year, even though many other industries are having a tough time. Couple that with many new releases that have come along this year and will come along in the next as well as new companies joining the fray, I think that it’s safe to say that we’re not on the brink of collapse. But it sure would be nice to see earnings like we have in certain past ages and the arcade sector does need some help, especially since the premise in the minds of many is that the industry is dead as a doornail.

So what is Sega’s plan for dealing with the challenges that we face? They break it down into four parts:

-Promote revenue sharing with operators that includes connectivity through Sega’s ALL.NET service to connect player communities together

-Make use of standardized cabinets so content can be replaced quickly and cheaply (this is something we have discussed before on the forums)

-Effectively promote their new Ringedge and Ringwide hardware to reduce costs (and BTW certain fanboys – no mention of using Ringwide as a home console)

-Diversify their product line-up to attract more players to amusement centers

I personally think that these are all great ideas that should see widespread adoption, and to elaborate further on what I think about it, continue reading by hitting the link below

When you run a company, you need a plan if you want to succeed in that business. Some corporations are more open about their plans in public than others and when it comes to the arcade industry, most companies are tight-lipped about what they intend on doing. Every company in the industry should be interested in seeing arcades expand and grow and when it comes to that, Sega has a plan for doing their part to revitalize the business as we read in an article from Siliconera.

Now the article does start out with a slightly false premise by suggesting that “arcade business is down, way down”. I guess it depends on what era you are comparing it too but really, my own arcade business is doing great at the moment and I know of others who also are seeing good business this year, even though many other industries are having a tough time. Couple that with many new releases that have come along this year and will come along in the next as well as new companies joining the fray, I think that it’s safe to say that we’re not on the brink of collapse. But it sure would be nice to see earnings like we have in certain past ages and the arcade sector does need some help, especially since the premise in the minds of many is that the industry is dead as a doornail.

So what is Sega’s plan for dealing with the challenges that we face? They break it down into four parts:

-Promote revenue sharing with operators that includes connectivity through Sega’s ALL.NET service to connect player communities together

-Make use of standardized cabinets so content can be replaced quickly and cheaply (this is something we have discussed before on the forums)

-Effectively promote their new Ringedge and Ringwide hardware to reduce costs (and BTW certain fanboys – no mention of using Ringwide as a home console)

-Diversify their product line-up to attract more players to amusement centers

I personally think that these are all great ideas that should see widespread adoption, and to elaborate further on what I think about it, continue reading by hitting the link below

If you live anywhere near Omaha Nebraska then you have a new entertainment facility to look forward to visiting sometime in the future. At the moment it is called “The V” which I am guessing stands for “The Venue”. The multimillion dollar project is currently looking for investors and other entrepreneurs to help make the project a reality and from the sounds of it, The V should be a cool place to check out once it is finished. According to the website:

The V is a 45,000 square foot multi-attraction entertainment concept consisting of a variety of amusement attractions and a casual dining restaurant targeting families, young adults and corporations. Amusement attractions offered by The V will include a 16 lane open play bowling center, 4 lane upscale private bowling lounge, 110 player station game zone, rock climbing, mini-bowling, laser tag arena, multi-player game attractions, billiards, darts and shuffleboard. The V will also have dedicated private meeting space for corporations and groups and party rooms available to host family parties.

As you can see from the picture above, the facility will have plenty of open space and it sounds like it will have a sizable arcade although we will have to wait and see how they will go about designing that. From the sounds of it, a major focus at the facility will be one geared towards providing a modern bowling experience. At present there is no ETA given on when they expect to have everything built and ready to go but you can find out more information can be found at the official project website here.

For the past little while, the only stories we have posted regarding Chuck E. Cheese have been negative stories, dealing with the wave of adults who get into fights with each other at their kids’ birthday parties. So it’s nice to see a positive story about the company popping up for a change, especially where they are posting a nice increase in profits for the 3rd quarter of 2009. With this story dropping it leads me to ask those of you out there who are running an arcade/FEC/route location – how did your business do last quarter (or how has it been doing for the past year)? I have heard from some operators recently that they have been having a good year, one even told me that they were having their best year ever. Personally the beginning of this year was pretty bad but after I moved locations last quarter we are seeing our best earnings yet but since we are in a different spot, it is difficult to pin it up against last year seeing how the new place naturally picks up more foot traffic by being inside of the mall.